Sales fall for Detroit 3 in June amid industry slowdown

Associated Press

July 5, 2017

DETROIT — Sales in June fell 7 percent at Fiat Chrysler Automobiles, 5.1 percent for Ford and 4.7 percent for General Motors amid a broader industry decline now entering its sixth consecutive month.

Sales of Ford SUVS such as the Explorer, Edge and Flex were strong during the month but were not enough to overcome the 23 percent drop the automaker saw in car sales. The story was similar for GM, where a number of new or recently launched SUVs, such as the Chevrolet Equinox and Buick Envision, could not counteract falling sales of cars such as the Chevrolet Cruze, Malibu and Impala.

At Fiat Chrysler, sales rose 6 percent for Ram and soared for the Alfa Romeo brand but fell 11 percent for Jeep, a surprising decline for a brand that sells nothing but SUVs, the market’s best-performing segment.

“Yes, Jeep is shifting around its models, but this is Jeep’s market and one you would think they would be able to capitalize on,” said Michelle Krebs, a senior analyst for AutoTrader.com.

Among Asian automakers, sales increased 2.1 percent for Toyota, 2.0 percent for Nissan and 0.8 percent for Honda. Meanwhile, German automaker Volkswagen, recovering from its diesel emissions scandal, said its sales increased 15 percent in June.

While automakers are still selling cars at a healthy pace, they are spending more money on incentives and using longer lending terms to do so, leading to concerns that sales are poised to fall faster than they were expected to at the beginning of the year.

Edmunds.com, Kelley Blue Book and LMC Automotive all predict overall industry sales in June will fall between 2-4 percent. The projections translate to a seasonally adjusted annualized selling rate of 16.5 million, the industry’s weakest first half of a year since 2014.

“U.S. total sales are moderating due to an industry-wide pull-back in daily rental sales, but key U.S. economic fundamentals clearly remain positive,” Mustafa Mohatarem, GM chief economist, said in a statement Monday. “Under the current economic conditions, we anticipate U.S. retail vehicle sales will remain strong for the foreseeable future.”

FORD

Ford said it sold 227,979 cars and trucks in June, down from 240,109.

Among Ford’s SUVs, sales rose 23 percent for the Explorer, 20 percent for the Edge and 26 percent for the Flex. However, sales fell 20 percent for the Focus compact car and 31 percent for the Fusion mid-size sedan.

“Customers drove a record 406,464 Ford brand SUV sales in the first half of this year,” Mark LaNeve, Ford’s vice president of sales, said in a statement.

Declines in industry sales, even if modest, could cut into the automaker’s profits and could lead to production cuts at auto plants across the U.S.
 

GENERAL MOTORS

Buick was the star brand for GM in June, with a sales increase of 16.4 percent. That gain was driven by a 248 percent gain for the Envision SUV and a 7 percent gain for the smaller Encore SUV.

However, sales fell 3.6 percent for GMC, 6.4 percent for Chevrolet and 11.8 percent for Cadillac.

Sales rose 49 percent for an all-new Chevrolet Equinox SUV and 27 percent for the GMC Acadia SUV but fell 31 percent for the Chevrolet Cruze compact car, 33 percent for the Malibu midsize car and 77 percent for the Impala full-size car.

“The all-new Equinox is off to a strong start and we will leverage that momentum as we introduce four additional crossovers in the second half of 2017,” said Kurt McNeil, U.S. vice president of sales.
 

FIAT CHRYSLER AUTOMOBILES

At Fiat Chrysler, the company’s Ram brand continues to gain ground and the new Alfa Romeo Giulia sedan is boosting numbers as the automaker relaunches that brand in America. However, sales fell 14 percent for Dodge and 15 percent for Chrysler in June.

Sales for the Jeep brand, which has been red hot in recent years, fell 11 percent in June and have dropped 13 percent for the first half of the year to 406,291.

Over the first six months of the year, sales of Jeep SUVs have declined 1 percent for Wrangler, 19 percent for Cherokee, 49 percent for Patriot and 49 percent for Compass. Sales did increase 2 percent for the Renegade and 16 percent for the Grand Cherokee. Jeep also is in the process of launching an all-new Compass and is still building inventory at its dealerships for that SUV.
 

LOWER EXPECTATIONS FOR 2017

The slowdown in sales is causing both automakers and analysts to cut their predictions for the year.

Last week, LMC Automotive cut its forecast for 2017 to 17.1 million units, down from 17.2 million. That would work out to a 2.3 percent decline from the 17.55 million vehicles automakers sold last year, which was a record.

“Nerves are being tested,” Jeff Schuster, senior vice president of forecasting at LMC Automotive, said in a report. “It will be challenging in the second half of the year to keep pace with 2016, so some additional weakness and further risk are expected in both fleet and retail volume, but a year still expected above 17 million units should not be considered a poor performance.”